sebi:CGM/GG/QJC2/WRO/WRO/22237/2022-23
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Facts / Headnote
Noticee found in violation of multiple provisions of IA Regulations, PFUTP Regulations, Intermediaries Regulations, and SEBI Act; found not to be a 'fit and proper person'
Provisions invoked
- s. 19
- s. 11(4)
- s. 11B
- s. 12A
- s. 12(3)
- s. 154
- s. 6(1)
Regulations
- Reg. 3
- Reg. 6
- Reg. 2(1)(c)
- Reg. 9
- Reg. 25
- Reg. 3(a)
- Reg. 15(1)
- Reg. 13(a)
- Reg. 23
- Reg. 15
- Reg. 21(1)
- Reg. 7
- Reg. 15(3)
- Reg. 28
- Reg. 4(2)(k)
- Reg. 24
- Reg. 27
- Reg. 15(9)
- Reg. 13(b)
- Reg. 6(f)
Parties
- Flanking Research and Investment Advisor (Proprietor - Mr. Tarun Chandani), INA000010195
Holding
The Noticee was found in violation of multiple provisions of the IA Regulations, PFUTP Regulations, Intermediaries Regulations and SEBI Act, including failing to discharge inspection obligations, improper risk profiling, misleading clients about SCORES complaints, engaging in activities outside investment advisory, and fraud against clients. The Noticee was also found not to satisfy the criteria of a 'fit and proper person' under Schedule II of the Intermediaries Regulations.
Full text
Enquiry Order in the matter of Flanking Research and Investment Advisor Page 2 of 36 3. The findings of the inspection report, which were based on the complaints received against the Noticee, led to initiation of enquiry proceedings against the Noticee in terms of the SEBI (Intermediaries) Regulations, 2008 (hereinafter referred to as “Intermediaries Regulations”) and a Designated Authority (hereinafter referred to as “DA”) was appointed under Regulation 24 of the Intermediaries Regulations to enquire into the following violations alleged against the Noticee: a. Regulation 13(a), 15(12), 25(1) and 25(2) read with Regulation 24(3) and Clause 8 of Code of Conduct specified under Third Schedule read with Regulation 15(9) of IA Regulations for failing to furnish complete information and discharge its obligations during inspection conducted by SEBI. b. Regulation 13(b) of IA Regulations for failing to inform SEBI regarding material information related to its activities. c. SEBI Circular no. CIR/OIAE/1/2014 dated December 18, 2014 and Regulation 21(1) read with Regulation 28(f) of IA Regulations for non-redressal of SCORES complaints. d. Clause 1(iv) of SEBI Circular SEBI/HO/IMD/DF1/CIR/P/2019/169 dated December 27, 2019 for displaying incorrect information about SCORES complaints. e. Regulation 4(2)(k) and 4(2)(s) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (hereinafter referred to as “PFUTP Regulations”) for misle
Enquiry Order in the matter of Flanking Research and Investment Advisor Page 3 of 36 i. Regulation 15(1), 17(a), (c) and (d) of IA Regulations, Clauses 1, 2, 5, 6, and 8 of Code of Conduct as specified in Third Schedule of IA Regulations read with regulation 15(9) of IA Regulations, Regulation 3(a), (b), (c), (d) of PFUTP Regulations read with section 12A(a), (b) and (c) of SEBI Act, 1992 for improper risk profiling and suitability assessment of clients and engaging in acts to defraud clients. j. Schedule II of Intermediaries Regulations read with Regulation 7(2)(e) of Intermediaries Regulations and Regulation 6(f) and 13(a) of IA Regulations for failing to satisfy the criteria of ‘fit and proper person’.
Enquiry Order in the matter of Flanking Research and Investment Advisor Page 4 of 36 Post Enquiry Proceedings: 6. A post-enquiry Show Cause Notice dated September 30, 2022 (hereinafter referred to as “Post Enquiry SCN”) was issued to the Noticee enclosing a copy of the Enquiry Report submitted by the DA and calling upon him to show cause in terms of Regulation 27 of the Intermediaries Regulations as to why actions as recommended by the DA should not be imposed against the Noticee in terms of the said Regulations.
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Source: SecMarx — sebi:CGM/GG/QJC2/WRO/WRO/22237/2022-23. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.